ALEX BRUMMER: No one should underestimate enthusiasm of US authorities for making banks pay big and in full

You have to feel some sympathy for John Cryan the British boss of Deutsche Bank. When he took the helm of the German lender in July 2015 he found it loaded with bad loans and all manner of regulatory disputes.

Now Deutsche has been targeted by the US Justice Department (DoJ) for penalties of $14bn (£10.5bn) over its sales of mortgage-backed securities.

The scale of the potential penalty is far beyond the money set aside in the bank’s accounts, and happens to be the same number as the €14bn (£12.5bn) levy that the European Commission is seeking to impose on Apple over its Irish tax avoidance.

Deutsche trusts that the DoJ penalty is just a first draft and can be negotiated down.

If it really thinks that it should perhaps talk to BNP Paribas and Standard Chartered, both of which felt they were in with a fighting chance of defying US justice, but failed miserably.

It is a little hard to feel any schadenfreude about Deutsche Bank’s problems, even though Britain is on its way out of the EU.

The 72 per cent state-owned Royal Bank of Scotland and publicly quoted Barclays still have to settle their differences with the US over mortgage-backed securities. Neither British bank has put aside sufficient sums to cover industrial scale fines of the kind faced by Deutsche.

No one should underestimate the enthusiasm of the US authorities for making banks pay big and in full. JP Morgan Chase was fined $13bn for much the same offences, Citigroup $7bn and Goldman Sachs $5.6bn.

And Goldman dumped most of its mortgage securities before the financial crisis hit eight years ago when Lehman Brothers imploded.

The implications of the DoJ campaign for RBS and Barclays should not be underestimated. The two banks may be far better capitalised than at the time of the financial crisis, but penalties on this scale could punch a huge hole in their balance sheets and require new capital raisings. Barclays would need to speed up asset sales and might even have to sacrifice the dividend. So it is no small wonder that both shares tanked in latest trading, dragging down the FTSE 100.

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Fining banks is all very well, except it is not the bankers, who caused the mess, but shareholders and taxpayers who suffer. US Senator Elizabeth Warren, who helped set up the US Consumer Financial Protection Bureau post the financial crisis, is outraged that nine senior financiers – including Stan O’Neal of Merrill Lynch, and Robert Rubin and Chuck Prince of Citigroup – have never been prosecuted. All have been accused by regulators of giving false evidence and misleading credit agencies and the authorities.

A senior UK banker once told me that bad behaviour at banks would not be resolved until co-workers, customers and the public saw top executives carted off to chokey in handcuffs. That still has not happened.

Choosing Kim

World Bank president Jim Yong Kim has been a different kind of leader at the global development lender, focusing on pet issues such as health policy, climate change and responses to the global refugee crisis.

Along the way he has failed to win the wholehearted support of the Bank’s notoriously rebellious staff, stuffed with PhDs, or respected outsiders such as the bank’s former chief economist Nobel Prize winner Joseph Stiglitz. Despite the critics, and a declared desire by the executive board for an open selection process, Kim is marching speedily to re-appointment this week.

President Obama – who renominated Kim – seeks to make sure that whoever is elected his successor in November, the Bank remains in safe Democrat hands. Curiously Britain’s new, harder-nosed Secretary of State for International Development Priti Patel was quick to endorse Obama’s choice, despite her harsh assessment of how aid money is spent. Britain, as the biggest contributor to the Bank’s poverty fighting arm the International Development Association (IDA), and with a magnificent aid budget of £12bn, could have made a different choice.

It looks as if Kim will be reappointed without challenge. He may well be the right person, but Patel needs to explain why she put a tick against his name so quickly and why other candidates, from the developing countries, were not considered. After all, Obama won’t be around much longer to repay any political favours – as if he would, anyway.

Brexit notes

You may never have heard of Skepta, who has just won the Mercury prize, or his Grime music that comes from North London’s estates.

More familiar will be the last two Beatles, Paul McCartney and Ringo Starr, on the red carpet in London this week for a movie launch. But what all these artists and other talented souls have in common is they are part of creative Britain which last year notched up an £11bn surplus on trade with the rest of the world.

None of this creative stuff is covered by traditional trade deals and indeed the money which our musicians, writers and broadcasters earn overseas should be worth some 15 per cent more following the post-referendum devaluation of the pound. Didn’t hear much of this from luvvies for Remain.